Have State Comprehensive Planning Mandates Reduced Insured Losses from Natural Disasters?

Abstract

This article examines the relationship between state requirements for preparation of local government comprehensive plans and claims paid by property insurance companies for losses due to weather-related natural disasters between 1994 and 2000. During the period studied, insurance companies paid out more than $26 billion (in constant 2000 dollars) for disaster-related claims arising from losses to residential property. Although a majority of states do not require local governments to prepare comprehensive plans, 24 states do require plans, and 10 states specifically require that mandated plans pay attention to natural hazards. Multivariate analyses indicate that insured losses to residential property over the period studied could have been reduced by 0.52% if all states had required local comprehensive plans and by a further 0.47% if, in addition, they had required consideration of natural hazards in local plans. Over the period studied, if all states had required comprehensive plans with hazard mitigation elements, the toll in insured losses to residential property from natural disasters would have been reduced by approximately $213 million in constant 2000 dollars (